"Perhaps the sentiments put forth here are not yet sufficiently fashionable to procure them general favor. A long habit of not thinking a thing wrong gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason."
--Thomas Paine

Wednesday, April 05, 2017

Screwed again, Trump voters stand by their man.

As Passover approaches, a parable is in order: Moses never entered the Promised Land, only his followers did. If Donald Trump were Moses, however, things would have been different. Moses F. Trump would have said to his followers standing by the bank of the Jordan River, "You guys wait here, I will be right back." Then he would have crossed the river into the Promised Land. He would have claimed that land of milk and honey as his own, leaving his followers stranded on the side of Mount Nebo.

* * * * *

A month short of his first hundred days, and Donald Trump's job approval/disapproval rating according to the Quinnipiac University Poll dropped to a new low. His 35% approve vs. 57% disapprove rating. Subtract one from the other and you get minus 22, which can be a shorthand way of referring to it. As in Trump's approval is at minus 22. This marked a decline from 41% approve vs. 52% disapprove (-11) in the same poll four weeks earlier, and beat out Barack Obama’s worst approve/disapprove rating of his presidency, 38% approve vs. 57% disapprove (-19) reached on December 10, 2013.

Trump's job approval level slipped across nearly every party identity, age and sex sub-group identified in the poll compared to four weeks earlier. Among Republicans, his job approval slipped 12 points from a stratospheric 91% to 79%, while among non-college educated whites he declined nine points from 60% to 51% approval. Only among Democrats did Trump's approval edge up, from 5% approve vs. 91% disapprove to 6% approve vs. 89% disapprove. Just by way of comparison, in early April 2001, after the contentious 2000 presidential election, George W. Bush approval rating among Democrats was 37%.

For those puzzled by Trump's still-strong support among Republicans, the answer is simple: he has delivered. Roughly speaking, the coalition that elected Donald Trump can be divided into three groups: economic conservatives, social conservatives and Trump's base--largely comprised of disaffected, less educated, white working class voters.

The first group, economic conservatives, were probably the most skeptical of Trump as a candidate, but they turned out for Trump hoping that he would deliver on his promises of lower taxes and reduced regulation. Now, two month into the administration, that group is probably more positive than they were on election day, as both tax reform and deregulation have been a central focus of the Trump agenda and the prospects for tax cuts remain strong.

The second group, social conservatives, supported Trump in the hope, first and foremost, of a conservative nominee to replace Antonin Scalia on the Supreme Court. For that group, Trump delivered in his first week, with an executive order reinstituting the global gag rule, cutting of federal funds to international organizations that provide family planning services. And this week, Neil Gorsuch, conservative jurist, is on his way to the Supreme Court.

The third group--the @realDonaldTrump voters--turned out for love, pure and simple. Since the early days of his presidency, Donald Trump and Steve Bannon have maintained a sharp focus on Trump's campaign promises to his base and sought to address them one at a time, through both real and symbolic actions. Trump promised to kill the TransPacific Partnership, and he did so immediately upon being sworn into office. He promised a crackdown on immigration, and within days of his inauguration, teams of ICE agents began cracking down on undocumented immigrants in communities across the country. He promised he would institute a Muslim ban, and wasted no time in rolling out his first version of the Muslim ban. Indeed, his fights that ensued with the judges that blocked his executive orders may have burnished support among his core supporters even more than the ban alone would have. And Trump's most outrageous early morning tweets rekindle, week after week, the love of his most loyal supporters.

The debate within the GOP that killed the American Health Care Reform Act provided a wake-up call that things might not be so easy going forward. The first flurry of executive orders, and even the Gorsuch nomination, were low hanging fruit; they were all actions that Trump could take unilaterally, or, in the case of the Gorsuch nomination, that would face no opposition within the GOP on Capitol Hill. The real work began with healthcare legislation.

The negotiations around the repeal of Obamacare laid bare the cruel underbelly of Donald Trump's politics. He never actually had a plan for delivering on his campaign promise of better healthcare, for more people at a lower cost; it was just a great applause line at his rallies. He knows the depth of trust that his supporters have invested in him, but showed no compunction about turning his back on their interests in pursuit of his own, when the time came. As the legislation moved forward, it became apparent that if the price of winning--which for Trump was defined as destroying Barack Obama's signature creation--was selling his core supporters down the river and saddling them with higher costs, reduced benefits and less access to healthcare, Trump was fully prepared to accept that deal.

Most Americans were not fooled about the impacts of the deal that was in the works. By the time the healthcare bill came up for a vote, the public had soured on the entire exercise. According to the Quinnipiac poll, only 17% of those polled supported the bill. Yet buried within the Quinnipiac numbers was that continuing enigma of American politics--the Trump voter. Alone among the demographic sub-groups polled, a majority of non-college educated whites supported the Republican healthcare plan, notwithstanding the analyses by the Congressional Budget Office and the Kaiser Family Foundation that suggested that those families stood to lose the most in terms of increased health insurance cost, reduced benefits or lost coverage compared to the Affordable Care Act status quo.

The healthcare bill was the metaphorical equivalent of Donald Trump shooting someone on Fifth Avenue during broad daylight, but in this case Trump shot point blank at those who supported him, and, as he predicted, they did not flinch. Trump has now assured his supporters that a second effort at healthcare reform is underway, but there is no evidence that he intends to protect the economic interests of those he considers his base any better during this next go-round.

Healthcare reform has much in common with tax reform, which is next up on the GOP agenda. Both are issues with clearly identifiable winners and losers, as well as well-heeled political and policy advocates prepared to do battle as legislation moves forward. As was the case with respect to replacing Obamacare, Donald Trump made promises to his core supporters, promising "massive middle-class tax cuts" while making sure that no net benefit would accrue to the top 1%. But, as with the drafting of the healthcare legislation, that is not the way things are headed.

Trump's point person on tax reform, Treasury Secretary Steve Mnuchin, has suggested repeatedly that "there is very, very strong support" for a tax bill. Of course there is. Tax reform is a Christmas tree, and every industry sees it as an opportunity to advance their economic interests. In the name of growth, corporate and individual tax cuts are handed out. In the name of corporate tax repatriation, a tax holiday is granted on repatriated corporate profits. It all translates into higher after tax incomes for wealthy taxpayers, executive compensation, and dividends. What's not to like?

The problem, of course, is that old deficit thing. Republicans had been counting on hundreds of billions of dollars in savings from repealing Obamacare that have yet to materialize to offset the budget impact of their corporate and personal income tax cuts. They need the budget offsets if they are going to be able to comply with the "Byrd Rule" that allows legislation deemed to be budget neutral to be approved with a simple majority rather than 60 votes. If tax reform has to be structured as revenue neutral on a stand-alone basis--meaning that for everyone who gets a tax cut, someone else has to pay more--the prospects become much more problematic.

While Mnuchin has repeatedly stressed Donald Trump's commitment to massive middle-class tax cuts, that is not so simple to accomplish. Much of the middle class--as Mitt Romney famously pointed out four years ago to a group of hedge fund managers in Palm Beach--pays little or no federal income tax. As it turns out, Romney was telling the truth, and if he had been as willing to defend his facts as Donald Trump has been willing to defend his lies, Mitt Romney might have won the Presidency in 2012, Donald Trump would still be the host of Celebrity Apprentice, and we all would have been spared the mayhem that has infected our politics over the past year and a half.

The problem with Trump's tax cut promises to his supporters is inherent in Romney's observation. If people pay little or no federal income tax beyond the social security payroll tax, it is hard to promise them a massive income tax cut. According to the most recent Congressional Budget Office data, the second quintile of households--those whose incomes are in the 21-40% range of all households--paid an average income tax rate, net of refundable tax credits, of negative 1.2%, while the third and fourth quintile of households paid average income tax rates of 2.6% and 6.1%, respectively. If the average tax rate for the middle quintile is 2.6% and the average household income for that group is $70,000--implying a tax bill in the range of $1,800--there are limits to what a massive middle-class tax cut might look like, and those data suggests that health insurance costs are of far greater consequence than federal income tax rates for middle-class families. Cutting the social security payroll tax rate, which adds an additional 8-9% tax burden, may be what Trump has in mind, though that would undercut the stability of the social security system, which Trump has pledged not to touch.

More likely, Trump has nothing particular in mind beyond campaign rhetoric. Just as he proved himself willing to walk away from his pledge to reduce the cost of health insurance paid by his core supporters, he will most likely walk away from his pledge to massively cut their tax bill as well. Trump is committed to passing major tax reform legislation this year and he is not going to walk away from whatever Republican negotiators are finally able to put together just because it fails to deliver middle class families a tax cut that, one observer commented, will barely buy them more that a hamburger or two.

Donald Trump will not the first Republican to have seduced white working class voters, only to turn his back on their economic interests. Richard Nixon and Ronald Reagan built their electoral coalitions around white southern and working class voters who had long been part of the base of the Democratic Party. The difference is that while Nixon and Reagan drew those voters into the modern Republican Party coalition on the basis of social issues and grievances, Trump built on the Patrick Buchanan platform of economic nationalism as he suggested making the Republican Party into the "workers' party." Trump's new Republican Party was not just going to be about Pro-Life judges and protecting guns, but about trade, walls and Muslims, as well as reducing the cost of and expanding access to health insurance, and those massive, massive tax cuts.

This week's poll numbers provide the first hint that Trump's core supporters are beginning to realize that they have fallen for the same old con yet again: they delivered their votes and once again their economic interests are being ignored. In the Obamacare overhaul and tax reform negotiations, Donald Trump's commitment to them has proven to be nothing but words. But their blind loyalty to him remains, as support for Trump among among Republicans and non-college educated whites (without regard to political party) continues to be strong--with approve/disapprove ratings at 79%/14% and 51%/39%, respectively. But not so Republicans in Congress, whose approve/disapprove ratings among non-college educated whites came in this week at 29%/60%, or negative 31. When those Trump voters finally wake up, Republicans in Congress are the ones who will likely feel their wrath.

Follow David Paul on Twitter @dpaul.Artwork by Jay Duret. Follow him on Twitter @jayduret or Instagram at @joefaces.